QUIZ # 11

Quiz

Nominal GDP was $9,500 billion in Year 1 and $10,000 billion in Year 2. The GDP price index was 170 in Year 1 and 175 in Year 2. Between Years 1 and 2, the rate of growth in real GDP was approximately:

1.6 percent.

2.3 percent.

4.4 percent.

5.3 percent.

Which would be the best economic measure to compare standards of living among nations over time?

changes in labor productivity

changes in real domestic output

changes in real income per capita

changes in nominal income per capita

Economic well-being is understated by growth rates because they:

account for pollution expenditures.

don't account for improvement in products.

account for illegal activity.

don't account for the slowdown in productivity.

When the rate of growth of real GDP per capita is reported, it accounts for:

environmental problems within the economy.

changes in the domestic output per person.

improvement in product quality per person.

increases in available leisure time for people.

Which phase of the business cycle would be most closely associated with an economic contraction?

peak

recession

trough

recovery

A recession is a decline in:

the full-employment unemployment rate over a year.

the natural rate of unemployment.

GDP that lasts six months or longer.

GDP that lasts one year or longer.

The level of total spending is the immediate determinant of the:

ratio of private to public goods production.

level of real output and employment.

size of the labor force.

inflation rate.

Which industry or sector of the economy would least likely be affected by the business cycle?

automobiles

consumer durables

capital goods

services

The total population of an economy is 175 million, the labor force is 125 million, and the number of unemployed is 8 million. The unemployment rate for this economy is:

4.6 percent.

5.8 percent.

6.4 percent.

7.8 percent.

Official unemployment rate statistics may:

overstate the amount of unemployment by including part-time workers in the calculations.

understate the amount of unemployment by excluding part-time workers in the calculations.

overstate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employmen

understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.